Dominican Republic President Leonel Fernández speaks at his swearing-in ceremony in Santo Domingo, August 16. Fernández was sworn in as president for a third term.

President Leonel Fernández promised to boost agricultural production and warned of dire economic times as he was sworn in for a third term on Saturday.

He said a shaky United States (US) economy, rising fuel and food prices would bring his country economic hardship, and he asked a joint session of Congress to approve US$210 million in loans for farmers to increase output and counter the downturn.

He boasted of more than nine per cent annual economic growth during his previous term, and noted unemployment had fallen to 14 per cent from 20 per cent during a 2004 economic crisis.

But "as this third term begins, a deteriorating global economy that has not been seen since the Great Depression is looming in the horizon," he said.

Fernández coasted to re-election in May after two non-consecutive terms as president, bolstered by growth in tourism and foreign investment.

Criticism

Even as his government faces criticism for using tax dollars to finance big-ticket items like a US$710 million capital city subway line, Fernández on Saturday unveiled dozens of new projects, including dams, highways and a remodelling of the national library.

He also promised that a second metro line would be inaugurated early next year, although the first one has not yet been opened. He did not say how much the projects would cost.

One in four Dominicans lives in poverty, despite the shopping malls and designer golf courses for tourists that are transforming the landscape of what once was a country of sugar plantations.

The US plays a pivotal role in the local economy; Americans buy about 80 per cent of Dominican exports, have major investments in manufacturing and real estate and represent the bulk of tourists.

The US is also home to more than one million Dominican migrants, who provide a 10th of the country's gross domestic product through remittances.

Fernández, who grew up in New York, recently implemented a major US trade agreement, and on Saturday credited International Monetary Fund (IMF) loans with helping to restore the economy after the collapse of several major banks sent the economy into a tailspin in 2004.

Foreign loans

But he also blamed US- and European-run world financial institutions for leaving developing countries dependent on foreign loans and vulnerable to skyrocketing oil, and commodities prices. Fernández said small nations needed better representation within the groups like the IMF and World Bank.

"Free trade is not enough if at the same time it is not fair trade," he said.

Dignitaries including the presidents of Chile, Colombia, Equatorial Guinea, Taiwan and Haiti, as well as the Crown Prince of Spain, attended Saturday's inaugural.

Nearly all of the hundreds of attendees were dressed in white, a Dominican custom for the traditional August 16 opening of Congress, which commemorates an 1863 battle against Spanish colonialists.

Tropical storm

Only about half the leaders expected to attend actually showed. Some might have been deterred by tropical storm Fay, which continued to dump torrential rains on to Santo Domingo as Fernández spoke.

Taiwan's new president, Ma Ying-jeou, was scheduled to meet with Fernández later on Saturday, the Taiwanese ambassador said. The Dominican Republic is on a shrinking list of 23 countries that maintain diplomatic ties with Taiwan instead of rival China.

US Representative Charles Rangel, who chairs the House Ways and Means Committee, also attended, and called Fernández's address "one of the most exciting speeches I have ever heard".